Energy & the Law

JANUARY 23, 2024

In Texas, no. Read on to learn why. In Nortex Minerals LP v. Blackbeard Operating LLC et al , the question was the meaning of this limited assignment provision in the “Alliance Leases”, oil and gas leases covering 27,000 acres of the Alliance Airport in Tarrant County: Except as provided herein, Lessee may not assign or otherwise transfer an interest in this Lease without prior written consent of Lessor, which consent may be granted or denied in the sole and absolute discretion [,] and without s

Natural Resources 147

Natural Resources 147

Energy & the Law

JANUARY 17, 2024

We haven’t presented 2023’s Bad Guys in Energy, but we have SEC v. Bowen, Baker, Cannon Operating and others as an example of garden variety securities fraud. The opinion addresses a defendant’s effort to defeat the SEC’s fraud claim by attacking the complaint. The “bad guys” are only alleged at this point. Bowen, Baker and others raised $2.1MM from 140 investors for Cannon Operating.

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Energy & the Law

JANUARY 8, 2024

Contacted at his seaside villa, Captain Renault said he was shocked that Elsie and Adrian Opiela are asking the Texas Supreme Court to review questions surrounding the Railroad Commission’s approval of a drilling permit for a Production Sharing Agreement well. The Commission’s “65% Rule” for multi-tract horizontal wells is invalid because the Commission does not have the authority to make such a rule.

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Regulations Law 147

Energy & the Law

JANUARY 3, 2024

In re Luminant Generation Company LLC et al is a bitter pill for the litigation hangover from Winter Storm Uri. Takeaway: Texas does not recognize a legal duty owed by wholesale power generators to retail customers to provide continuous electricity to the electric grid and ultimately to the customers. The claims Hundreds of retail electricity customers sued hundreds of entities involved in virtually every aspect of the Texas electricity market.

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Energy & the Law

DECEMBER 21, 2023

About the same as what happened at COP27. The 70,000+ fabulists, opportunists, and assorted acolytes comprising the congregation of the Church of Our Holy Mother of the Suffering Planet celebrated another high mass in, of all places, Dubai UAE (producer of 4 million barrels of oil per day).The worshipers heard righteous condemnation of the sin of carbon. its been said that abandoning fossil fuels without delay, with no realistic present-day alternatives, is a moral imperative.

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Energy & the Law

DECEMBER 14, 2023

Parkman v. W&T Offshore, Inc., et al features two contractors playing hot potato over liability for a company man’s alleged negligence. The takeaway: Write your Master Service Agreement to address your liability concerns, and then pay attention to what really happens on the location, regardless of what the MSA says. (And good luck monitoring that second factor!

Law 147

Law 147

Energy & the Law

DECEMBER 6, 2023

The outcome of a multimillion-dollar suit was in the hands of a jury of 12 good and honorable citizens. The question: Was a certain party an agent, consultant, contractor, or none of the above? One side wanted the jury to be instructed on the legal definitions of those terms. The other wanted the words to be interpreted in their “ordinary and popular sense”.

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Energy & the Law

NOVEMBER 30, 2023

See yesterday’s post on Iskandia Operating, LLC v. SWEPI, LP SWEPI’s motion for summary judgment alleged that Iskandia presented no evidence of one or more elements of its trespass claim, noting that the Supreme Court of Texas has never recognized a cause of action for trespass based on deep subsurface water migration (to which some might respond, not yet).

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Energy & the Law

NOVEMBER 29, 2023

I skandia Operating Inc. v. SWEPI, LP d/b/a Shell Western E & P reversed summary judgment for the defendant in a subsurface trespass claim involving injection of large amounts of produced water. The facts Iskandia produces oil from 100 wells across 5,000 acres from a shallow zone of the Delaware Mountain Group in the Dimmitt Field in Loving County.

Law 147

Law 147

Energy & the Law

NOVEMBER 21, 2023

A quiz: What do Big Oil and Galileo, and maybe you, have in common? Answer is below. Here is news and opinions about climate change that counters climate-alarm truthiness from emanating from some quarters. These facts and opinions are being said by those who know what they are talking about. Decide for yourself if you accept it. For example, fires are not getting worse, storms are not getting worse, and the polar bears are doing fine, says economist Bjorn Lomborg.

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Energy & the Law

NOVEMBER 13, 2023

The Duhig Rule is back, this time in Echols Minerals LLC, et al v. Green et al. Framing the discussion, Duhig v. Peavy Moore Lumber Company and T rial v. Dragon In Duhig the grantor in a general warranty deed warranted title and reserved half of the minerals. The deed did not mention that a third party owned half of the minerals. Duhig breached the warranty the moment he conveyed the property because he could not both retain half the minerals and convey half when the third party owned that half.

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Energy & the Law

NOVEMBER 10, 2023

Fletcher v. Merritt resulted in several rulings on the proof required to prevail in a property dispute. Merritt filed a trespass to try title suit (actually a quiet title, which the court construed as TTT) against Fletcher for ownership of a 28.9 foot-wide strip separating their lots. In concluding that the evidence was legally and factually sufficient to support adverse possession in favor of Merritt the court clarified several aspects of Texas adverse possession and TTT law.

Law 147

Law 147

Energy & the Law

NOVEMBER 7, 2023

Securities and Exchange Commission v. The Heartland Group Ventures LLC et al. explains what a receiver under federal law has the right to do. Much like Nick Saban’s offense against a certain team, she can do just about anything she wants. The assets The SEC applied for appointment of a receiver for a group of Heartland companies. The entities’ assets included 403 oil and gas wells and 110 miles of gas gathering and transportation lines called the Palo Pinto Pipeline.

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Energy & the Law

NOVEMBER 3, 2023

So, you found all the heirs and you have an agreed judgment stipulating title. Time to pay royslties? Maybe. And you have signed division orders. Surely, you can pay now? Maybe. These were the questions facing the parties in Perdido Properties LLC v. Devon Energy Production Company et al. Facts and events Ross Brady dies, bequeathing a royalty interest in Ector County, 75% to wife Pauline and 12.5% each to his two sisters.

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Conservation 147

Energy & the Law

OCTOBER 27, 2023

Most states call it a third-party beneficiary contract. Leave it to Louisiana to be different. In Adams v. Chevron USA Inc. , the plaintiffs claimed that oilfield pipe-cleaning activities of Chevron and others contaminated their land with NORM. The Grafers owned the land where, pursuant to a lease, the pipes and other equipment were cleaned. Plaintiffs also sought damages from the Grefers for their own alleged negligence.

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2014 147

Energy & the Law

OCTOBER 23, 2023

Foreshadowing a grim future for family weddings and funerals, Bell and Petsch v. Petch is a property dispute over five tracts of land in Gillespie County, Texas, in which siblings are the combatants. The events are less important than the takeaway: To win an adverse possession claim, the claimant must establish all six of the elements. Adverse possession , the requirements actual and visible possession of the disputed property that is adverse and hostile to the claims of the owner of record titl

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2020 Law 147

Energy & the Law

OCTOBER 19, 2023

The question in Self v, BPX Operating Company is how to balance the Louisiana Civil Code Art 2292 principle of negotiorum gestio against Louisiana’s conservation statutes. When a tract of land is subject to a unit formed under La. R.S. 30:9(B) and 30:10(A(1) and the tract is not subject to a lease, the unit operator can sell the landowner’s share of production but must pay the landowner his pro rata share of “proceeds”.

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Energy & the Law

OCTOBER 16, 2023

Barkley v. Connally , a “bet-the-farm” case if there ever was one, invokes the merger clause, a basic principle of contract law. Clients and lawyers: Read this analysis so as to avoid boundless grief and disappointment for client and lawyer alike. Jim Barkley, having undergone bankruptcy and nearing retirement, agreed to sell his farm to Connally, owner of an adjacent tract, if Jim and Ms.

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2017 Law 147

Energy & the Law

OCTOBER 10, 2023

Parish of Plaquemines v. Northcoast Oil Co. is yet another remand of yet another of the 43 suits filed in state courts against a legion of oil and gas companies under the Louisiana’s State and Local Coastal Resources Management Act of 1978. The suits arise out of the defendants’ decades-long oil production activities on the Louisiana coast. So far, the message seems to be: Producers, surrender to the jurisdiction of the state courts and trust in the wisdom of the well-intentioned citizen-jurors

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Fossil Fuels Government Regulations Law 147

Energy & the Law

OCTOBER 5, 2023

Can the Texas lessee perpetuate his oil and gas lease by “constructive participation” in wells drilled by another? Under the facts in Cromwell v. Anadarko E&P Onshore, LLC, the answer is no. Cromwell and Anadarko’s wells In 2009 Cromwell obtained the Ferrer and Tantalo leases covering small fractional interests in several sections. Anadarko owned working interests in the same sections.

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Energy & the Law

SEPTEMBER 28, 2023

Co-author Katherine Sartain* If you are scoring at home, count Permico Royalties LLC v. Barron Properties, Ltd. , as a win for “floating” in the fixed-or-floating royalty battles. Permico, successor to grantors in a 1937 Deed for a tract in Ward County, argued that a mineral reservation was of a ½ floating royalty interest. Barron, successor to grantee and owner of the mineral estate subject to the reservation, claimed that the deed reserved a 1/16 fixed royalty.

Law 147

Law 147

Energy & the Law

SEPTEMBER 15, 2023

Co-author Katherine Sartain * We begin with a document-drafting tip: When reserving an interest in minerals, before cutting and pasting from your old document that would be yellowed and dusty if it remained in its original papyrus format, lawyers and non-lawyers alike should consider Devon Energy Prod. Co. v. Enplat II, LLC. The Court was asked to determine whether a 1940 deed from Harris et al to Lopoo conveying a tract in Reeves County, Texas, reserved a cost-free royalty interest or a cost-be

Law 147

Law 147

Energy & the Law

SEPTEMBER 13, 2023

Unit Petroleum Company v. Koch Energy Services, LLC is another force majeure case arising out of winter storm Uri. Unlike a similar case, summary judgment was denied because, said the United States District Court, The word “reasonable”, although not ambiguous, is a question of fact that must be answered by looking into the circumstances of the case at issue, including the nature of the proposed contract, the purposes of the parties, the course of dealing between them, and any relevant usages of

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Natural Gas 2021 147

Energy & the Law

SEPTEMBER 7, 2023

Davenport v. EOG Resources, Inc. is an appeal of a temporary injunction. The title tells you the result. Davenport owned four tracts comprising 5,000 acres in Webb County that were originally part of a larger tract burdened by the 1967 Garner oil and gas lease. EOG has operated the lease since 1999 and its chief point of entry had been the Krueger Road gate on the east side of the ranch.

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Law 2022 147

Energy & the Law

SEPTEMBER 4, 2023

Co-author Stephen A. Cooney In Cactus Water Services LLC v. COG Operating, LLC. , a divided Texas court of appeals answered the question this way: The oil and gas producer prevails over the purchaser of the surface owner’s right to own and sell produced water. The majority discussed the composition of produced water. To be scientific, it’s got a bunch of nasty s$%^ in it that needs to be gotten rid of.

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Waste Natural Resources Law Technology 147

Energy & the Law

AUGUST 29, 2023

Rhetorical Question: When will Texas be done with fixed/floating royalty cases such as Johnson et al v. Clifton et al ? Rhetorical Answer: When scriveners of deeds that are open to eight conceivably plausible meanings have completed their remedial scrivening courses. How did it happen? In 1951 Young and others conveyed to Clifton and others several thousand acres in Reeves County by a deed reserving a 1/128 interest in oil, gas and other minerals.

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Energy & the Law

AUGUST 16, 2023

Co-author London England Producers disappointed by the Supreme Court’s holding in Devon Energy Production v. Sheppard might have reason to feel vindicated. The question in HL Hawkins Jr., Inc. v. Capitan Energy Inc. et al. was whether producer Capitan deducted impermissible post-production costs from gross proceeds used to calculate royalties. Lessor Hawkins‘ royalty was one fourth of gross proceeds.

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Energy & the Law

AUGUST 9, 2023

In Smart v. 3039 RNC Holdings LLC , the court reminds us that it will harmonize all parts of a contract, even one that “is not a model of clarity”, to reach the correct result. RNC owned the surface and 50% of the mineral estate in a 45.6 acre tract in Karnes County. RNC agreed to convey and Smart agreed to purchase the surface and part of the mineral estate.

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Energy & the Law

JULY 31, 2023

The plain, ordinary, and generally accepted meaning of a word doesn’t mean “anything goes”. It depends on context, says the Supreme Court of Texas in Finley Resources Inc. v. Headington Royalty Inc. , a dispute over the meaning of “predecessors”. For the underlying facts see our post on the court of appeals decision. The release The release in an acreage-swap agreement between Petro Canyon Energy and Headington said that “Headington [ releases, etc.

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Energy & the Law

JULY 18, 2023

California has passed Senate Bill 1137, which will prohibit drilling of new oil and gas wells and reworking of existing wells in certain areas. Here is SB 1137 in legislativese (analysis comes first, then the text): Here, in small part, is what the Bill does: The Bill defines “sensitive receptors” as Hollywood A-listers and Stanford law students and their VP of DEI scolding who cannot tolerate voices they don’t agree with “residences, education facilities, day care centers, colleges and universi

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Energy & the Law

JULY 14, 2023

Co-author Taylor Hall* The Texas Legislature has created a new Texas Business Court (the TBC) with jurisdiction over cases involving certain qualified (as in “big-dollar”) business transactions. HB 19 could affect large oil and gas cases; how and to what extent is to be determined. The consequences, intended and unintended, will be good and bad, depending on your point of view.

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Government Law 2024 130

Energy & the Law

JULY 12, 2023

The Austin Court of Appeals has ruled in Texas Railroad Commission et al v. Opiela , the dispute over a permit for a horizontal well under a Production Sharing Agreement. We reported on the result in the trial court. Here are some highlights of the appeal. Where did the 65% rule come from? The court traced the Commission’s authority to a 2008 minute entry in which two of the three commissioners approved a permit while directing staff that wells that are permitted based on PSA’s should be approv

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Energy & the Law

JUNE 28, 2023

LSU 3B Tommy “Tanks” salutes energyandthelaw at the Men’s College World Series. Co-author Cahill Maffei* Can a non-operating working interest in a Texas oil and gas lease be adversely possessed? The Amarillo Court of Appeals said yes in PBEX II, LLC v. Dorchester Minerals, L.P. In 1989, Torch Oil & Gas succeeded to a working interest in two producing gas wells.

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Energy & the Law

JUNE 23, 2023

Co-author Kamal Omar* Texas, famously, does not tax individuals’ income, but it does impose franchise taxes on “taxable entities”, such as limited liability companies. Federal tax law treats them as partnerships unless they elect to be treated otherwise. In Hibernia Energy LLC v. Hegar , a Texas court addressed how Hibernia, a non-taxable entity under federal law, is taxable under Texas law.

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Energy & the Law

JUNE 14, 2023

Co-author Emily Morris * One of the questions raised in 1776 Energy Partners, LLC v. Marathon Oil EF, LLC was whether Marathon as operator could apply revenues owed to non-operator 1776 under one joint operating agreement to satisfy unpaid debts owed on another. Unfortunately, we don’t have an answer. (FWIW, this is the same “1776” from a recent post , whiffing at the plate again with runners in scoring position.

Law 130

Law 130

Energy & the Law

JUNE 2, 2023

Freeeport-McMoRan Oil and Gas, LLC and Ovintiv USA Inc. v. 1776 Energy Partners LLC presented a recurring question faced by Texas oil and gas producers: When can proceeds of production be withheld by the operator without liability for interest? Ovintiv and its predecessor operator, Freeport-McMoRan, represented by Gray Reed partners Jim Ormiston and David Leonard , suspended proceeds it was contractually obligated to pay to non-operator 1776 in reliance on the safe harbor provisions of Sectio

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Natural Resources Law 130

Energy & the Law

MAY 24, 2023

Co-author Derek Younkers * And what a difference it was! In Apache Corp. v. Apollo Expl. LLC et al , Apache and others acquired an oil and gas lease on 100,000+ acres in the Texas Panhandle. The primary term was three years. The effective date was January 1, 2007, “from which date the anniversary dates of this Lease shall be computed”. Extension beyond the primary term required a producing well and the creation of three blocks of equal acreage from which the lessees would drill wells to a combi

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